Great Depression

economic boom pre-depression (people and vibe)

• WW1 led to decimation of European economies

• US replaced markets previously dominated by Europeans, trade with Western Europe 3x

• Warren Harding (21-23) + Calvin Coolidge (23-29) advocated for laissez faire capitalism

• Secretary to Treasury Andrew Melon (21 - 32) “The chief business of the American people is business”

pre-depression economic boom (stats and leg)

• 1921 Emergency Tariffs Act + 1922 Fordney McCumber Act protected price of US goods

• mass production

  • Henry Ford and T Model with use of assembly line production

  • incomes rose by 25% while prices for g+s flatlined or fell

• rise of technology

  • 70% of houses with electricity 1929

• increased popularity of credit

causes

• overproduction in industry + ag

• speculation

• buying on the margin/credit ($7B of all sales made on credit)

• high tariffs led to no international cooperation

• wall st. crash

black thursday

• October 24 1929

• stocks had been continually declining pre-crash

• massive amounts of selling began 24th (Black Thursday) which led to stock prices decreasing dramatically

• US Steel from 205.5 points to 193.5

• 6 important bankers injected $40M into shares

• market only fell 12 points

black tuesday

• 29th October 1929

• much more severe

• no banker intervention

• market fell 43 points

• estimated to have lost $30B

wall st crash

• religious groups believed divine warning against financial greed

• acted as a catalyst to economic tensions that had built overtime

• revealed + magnified pre-existing issues

social effects

• 26 000 businesses closed by ‘36

• unemployment @ 25%

• homelessness - hoovervilles

• decreased education levels

  • 300 000 children out of school by ‘38

  • Arkansas closed schools for up to 10 months because couldn’t afford to pay teachers

• AA unemployment @ 50% ‘33

• wealthy could retain and by property cheaply

farmers

• poorest lived in rural areas

• no access to features of mass consumerism such as cars and radios

• on 10% w electricity

• went bankrupt as unable to sell produce

the dust bowl

• series of droughts took place in the great plains in the early 30s

  • between 1930-34 rainfall in Nebraska down 27.5%

• hit states such as Texas and New Mexico

• poor farming methods and overgrazing left soil exhausted —> dust storms when windy

• ~ 850M tonnes of top soil blown away

• farmers moved West and discriminated against ‘Arkies’ and ‘Okies’

• worked for very low wages and lived in poor conditions on outskirts of towns

• 4M still on the road by end of decade

bonus marchers

• $350M had been allocated to veterans over a 20 year period

• veterans demanded the money upfront

• 1932

• 20 000 marchers in washington

• protestors refused to leave and set up camp but Hoover approved eviction in July

• Hoover believed they were conspiring a communist revolution

• 1000 armed soldiers evicted protestors —> 2 killed, 1000s injured

change in political views

• Roosevelt and New Deal example of liberal reformism

  • idea of making gradual changes to society and govt. focusing on indiv. rights, democracy and equality without radical action

• communists agitated for revolution

  • Communist Party of USA had 100 000 members

• Share Our Wealth (Huey Long)

  • class - based wealth redistribution

• Fr Charles Loughlin

  • popular radio personality

  • opposed to ND supported fascism

• government pre ‘32 highly unpopular

• disillusionment towards capitalism

herbert hoover

• orphaned @ 11

• self-made millionaire by 40

• not held govt. office until president in 29

• rugged individualism

• promised “tide would turn”

• wanted to support businesses + banks to revive economy

• believed local govts. + charities should provide social relief

• believed in volunteerism

• refused to provide direct federal aid

franklin delano roosevelt (1932 election)

• wealthy background

• had been senator + governor prior

• suffered from polio

• charismatic and charming

• influenced by WW and Jane Adams

• promised vigorous leadership + bold action

• won w overwhelming majority (472/531)

franklin delano roosevelt (in office)

• handled press well

• restored confidence in the people

  • “the only thing we have to fear is fear itself” (first inaugural address)

  • “let us unite against banishing fear … it is your problem no less than it is mine. Together we cannot fail”

• held fireside chats

  • addressed people directly by radio

  • heard by 80% of pop

  • used informal language such as “you and I” and “my friends”

  • created a united front against struggles of depression

the new deal #1

• promised in ‘32 campaign

• purpose

  • relief - provide jobs to unemployed and protect farmers from foreclosure

  • recovery - get the economy back into high gear

  • reform - regulate banks, abolish child labour, conserve farmlands

  • overall - to save capitalism

sources of ND ideas

• brain trusts

  • specialist + experts eg. college professors

• new economists

• roosevelt cabinet

  • incl. wide variety of views (liberals, conservatives, democrats, republicans)

  • led to conflict but most importantly compromise

• “Black Cabinet” made up of AA advisors under recommendation of ER and Ickes

first 100 days

• began sweeping legislation for economic repair

• instated interventionist policies that would usually be rejected by prlt.

• Emergency Banking Act

• Civilian Conservation Corps

• Glass Stegal Act

• Public Works Admin

• Federal Emergency Relief Admin

• National Recovery Admin

Emergency Banking Act

• 1933

• temporarily closed all banks

• created Federal Deposit Insurance Corporation

• insured bank deposits which encouraged Americans to put money bank in banks

Civilian Conservation Corps

• 1933

• created jobs for 3M men aged 18-25

• areas like flood control + fire protection

Glass Steagall Act

• 1933

• forced commercial banks to refrain from investment banking activities

• protected depositors form potential loss through speculation

Publics Works Administration

• 1933

• large-scale construction projects like buildings, roads + bridges

• aimed to reduce unemployment + boost economy

Federal Emergency Relief Administration

• 1933

• $1/2B to state and local relief agencies and work programs eg. soup kitchens + clothing services

• aimed to address widespread poverty and unemployment

National Recovery Administration

• 1933

• aimed to stabilise economy by promoting industrial cooperation

• established regulations on wages and working hours to improve labour conditions

• deemed unconstitutional in 1935

tennessee valley authority

• 1933

• area was poverty stricken, many w/o electricity

• aim was to build dams to control river and provide cheap sources of electricity to area

• 33 dams in ‘33

• became largest provider of electricity

• very successful, still in operation today

new deal #2

• AKA 2nd hundred days

• introduced more long-term social + economic reforms rather than addressing immediate crisis

• Works Progress Admin

• Social Security Act

• National Housing Act

• Fair Labour Standards Act

Wagner Act

• AKA National Labour Relations Act

• 1935

• granted workers rights to join/form unions + collectively bargain w employers

• created Fair Labour Practices Commission to regulate practices of companies used to discourage union membership

• union membership sharply increased following Act (4M - 16M in 1950)

Works Progress Administration

• 1935

• aimed to provide jobs to unemployed

• most previous programs included non-skilled building jobs

• WPA provided up to 10M jobs in building

• WPA created jobs for artists, writers, teachers + doctors

Social Security Act

• 1935

• created to combat poverty amongst the elderly and disabled

• created pensions for people >65, blind, “handicapped” + needy children

• america’s first welfare payment

Nation Housing Act

• 1938

• aimed to improve housing standards by making low income housing more sanitary + modernising existing housing

• created mortgage insurance which helped prevent foreclosure on family homes

Fair Labour Standards Act

• 1938

• set minimum wage

• established overtime pay

• restricted child labour in certain occupations and conditions

franklin delano roosevelt

• elected with overwhelming majority for 2nd term in ‘36 - 521/533 electoral votes

• feared SC would weaken ND so threatened to “pack the SC” and appoint additional justice for every one aged 70+ (Judicial Procedures Reform Bill 1937)

• charisma + active involvement in economic + social aspects of country revolutionised role of president + expectations of govt.

• unified AAs, unions, immigrants + poor voters under democratic party

criticisms of ND

• too expensive and didn’t eliminate GD

• unemployment still @ 17% in 1938

• AAA and NRA deemed unconstitutional

+ves

• offered relief through CCC, PWA, WPA

• offered reform through Glass-Steagall Act, Wagner, and SS

• first time govt. used deficit spending to help those in need (increased roughly 8% form 1929-39)

-ves

• didn’t lead to recovery in US economy

• some legislation deemed unconstitutional

• 10M unemployed in 1938

• wealth remained unequally divided, led to Huey Long’s Share our Wealth

agricultural adjustment administration

• 1933

• purpose was to recover ag sector by paying farmers to decrease production of basic crops such as wheat and livestock such as pigs

• farm incomes increased 58% BUT

• wastefully destroyed produce

• landowners didn’t pass on profits to tenant farmers + sharecroppers

• farmers never made enough money to stimulate economy

• deemed unconstitutional in ‘35 but reinstated in ‘38

african americans

• schemes negatively effected + excluded

  • domestic workers excluded form SS

  • FHA refused loans for black families living in white neighbourhoods

  • racial segregation in CCC + TVA

• life expectancy 10% less than whites

• WPA was “colourblind”, employed 1M AAs

• Roosevelt appointed 1st AA SCJ

mexican migrants

• unable to benefit from any legislation as not citizens

• growing resentment amongst whites as they took job opportunities

• 400 000 deported

women

• not included in NRA or FERA until ER campaigned for a female division

• traditional views still prevailed, little married women in workforce

• only 15% considered professional workers

• Economy Act 1932 prevented married couples from both holding federal govt. jobs